Will Texas Lottery vs. ‘Jane Doe’ Brew Mistrust In Lottery — Or Just Prove A Blip?

We’re about a month removed from “Jane Doe” filing a lawsuit against the Texas Lottery Commission over it not paying out her $83.5 million Lotto Texas jackpot she won from a ticket purchased via Jackpocket, a lottery courier app.

A week after she won that jackpot in February, the TLC announced it was banning couriers effective immediately. And, because of that, while an “investigation” of the situation continues, it has thus far refused to pay the jackpot.

Thus, the lawsuit.

(Jane Doe, it turns out, is actually named Kristen Moriarty, but she’s still Jane Doe as far as the official lawsuit is concerned.)

So, as news of this drama trickles its way outside of Texas, does it shake public trust in the lottery? Might this kind of controversy hurt ticket sales? 

And if it does have an impact, will the fallout be limited to Texas, or could it ripple across the country?

In short, how serious is the reputational damage here — or is this just a blip that people will quickly forget?

Based on Lottery Geeks’ conversations with a trio of industry experts, the short answer is … 

Blip.

But the long answer has some more nuance. Let’s get into it.

‘People will play the lottery no matter what’

Dustin Gouker, a gambling industry consultant and author of The Closing Line newsletter, told Lottery Geeks that if this situation were happening with national draw games Powerball or Mega Millions, he could envision a measurable impact on lottery sales.

But, in the end, a state-level drama won’t move the needle enough, he said.

“I think people will play the lottery no matter what,” Gouker said. “Despite [the Texas] incident, people have almost universally gotten paid in the history of lottery jackpots in the U.S.

“This is a state-specific lottery. But while this story has been covered a lot, I don’t think it’s reached anywhere near a critical mass of coverage in which people would stop trusting lotteries.”

In terms of any possible evidence of the Texas Lottery lawsuit impacting national lottery sales, the growth rate of Mega Millions jackpots has been a bit below average since mid-May — about 9.4%. The previous comparable cycle (two cycles ago; this most recent one saw a quick winner at $112 million) had a 10.1% average growth after eclipsing $100 million. Powerball had a winner May 31, so its recent growth rates are naturally inflated because it’s early in the jackpot’s run.

But it’s hard to attribute slower Mega Millions growth to the Texas story. For starters, the Mega Millions price point recently went up. And there is also a great deal of uncertainty in the economy right now, with spending down in most American households.

In May, for instance, the Bank of America Institute reported a 0.7% decrease in credit and debit card spending, the largest spending decline in a month since March 2023.

Sue Schneider, co-founder of the Defy the Odds startup launchpad and a gambling industry insider since 1995, told Lottery Geeks this whole Texas situation boils down to Moriarty being “collateral damage in the battle between the lottery and the couriers.”

But not much more than that.

“Weird set of circumstances,” Schneider said. “Doubt if that many folks are even aware of this whole thing outside the industry.”

‘Things will be tainted’

Matt Osgood, the owner and principal consultant of Lottery Solutions International, differed slightly in his opinion. He does believe there’s a chance the Texas story has a measurable impact on lottery sales — certainly in Texas, and also nationally.

“You can’t change the goal posts retrospectively,” Osgood said of the TLC nullifying the jackpot even though Moriarty bought the ticket before Jackpocket had been booted out of the state. “No payout will put doubt and mistrust in the minds of Texas consumers, which is the worst thing for a category grounded in trust, and so yes, that is likely to lead to a drop out of players and a loss of sales. 

“Depending upon the media profile, it has the potential to impact nationally too. Over time, the current customer base will still play, come back when a huge jackpot occurs, but things will be tainted.”

Osgood said there should have never been a lawsuit, because lottery couriers should have never been outlawed in the first place.

“Courier services are buying legitimate tickets into draws,” he said. “This winning ticket is just that: a winning, legitimate ticket — that was paid for, matched the numbers that came out in the draw on the date the ticket was valid. I am no expert on Texas law, but the lady in question has a legitimate purchase contract with the courier service. The courier service has a legitimate purchase contract with the lottery. Thus, the ticket in question is, without a shred of doubt, a winning ticket purchased legally in good faith and should be honored.”

If Hot Lotto fraud scandal didn’t ruin trust …

Part of the reason Gouker is doubtful the TLC vs. Jane Doe drama will hurt lottery perception in any meaningful way is because a much more significant scandal that rocked the lottery industry a decade ago didn’t.

Going back as far as 2005, there was a multi-state lottery rigging scheme called the Hot Lotto fraud, spearheaded by Eddie Tipton, the former security director of the Multi-State Lottery Association. Tipton tampered with the lottery’s random number generator software in a way that made it so he could predict winning numbers on specific dates. 

“This was a far more concerning scandal,” Gouker said, “and it didn’t impact lotteries to my knowledge.”

A suspicious attempt to anonymously claim a $16.5 million Hot Lotto jackpot in Iowa in 2010 began the unraveling of Tipton’s scheme. Investigators traced the ticket purchase to him, using security footage from a convenience store.

Tipton was arrested in 2015 and admitted to rigging jackpots across several states, including Iowa, Wisconsin, Kansas, and Colorado, totaling more than $24 million.

If that didn’t sour the public’s trust in lotteries in a lasting manner, then Gouker argued a feud between the TLC and lottery couriers that is unfortunately costing one woman a huge payout from a statewide draw game won’t either.